Indian Rupee: Dollar Weakness Likely To Support

1 Aug 2022 , 08:58 AM

Extended weakness in the US dollar overseas is likely to keep the Indian rupee supported on Monday, August 1, 2022. The dollar index eased below 105 mark, tracking lower treasury yields following Fed rate decision. However, poor risk appetite across Asian markets on the back of fading economic data could weigh on the local unit. Chinese factory output unexpectedly shrank in July as fresh curbs in the wake of rising COVID-19 cases dented economic activity. The official purchasing managers index (PMI) came in at 49 for July, below expectations of 50.4, and Junes reading of 50.2. On Friday, rupee gained 45 paise to close at 79.24 against the US dollar as heavy buying in domestic equities and weakness in the greenback bolstered investor sentiment. Besides, fresh foreign capital inflows also supported the domestic unit. At the interbank foreign exchange market, the domestic currency opened strong at 79.55 per dollar. It hovered in a range of 79.56 to 79.17 during the session. The domestic unit finally settled at 79.24 against the greenback, a gain of 45 paise over its last close. In the previous session, the rupee appreciated 22 paise to close at 79.69 against the US dollar. Domestic equity benchmarks surged on Friday, rising for the third straight session. The barometer index, the S&P BSE Sensex, jumped 712.46 points or 1.25% to 57,570.25. The Nifty 50 index advanced 228.65 points or 1.35% to 17,158.25. Foreign portfolio investors (FPIs) bought shares worth Rs 1,046.32 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 0.91 crore in the Indian equity market on 29 July, provisional data showed. Overseas, Asian stocks are trading lower on Monday as disappointing Chinese economic data fed doubts last weeks rally on Wall Street could be sustained in the face of determined policy tightening by global central banks. US stocks climbed for a third consecutive session on Friday as investors digested strong tech earnings and looked past concerns about high inflation and a recessionary environment. Powered by Commodity Insights